The Indian equity markets witnessed a significant upswing on Thursday, December 5, 2025, fueled by a surprise monetary policy decision from the Reserve Bank of India. Key benchmark indices climbed higher, with the Nifty 50 closing above the crucial 26,000 mark at 26,188, a gain of 0.59%. The S&P BSE Sensex rose by 0.54% to settle at 85,723, reflecting renewed investor optimism.
RBI's Surprise Move Ignites Market Rally
The primary catalyst for the day's bullish sentiment was the RBI's decision to cut the benchmark repo rate by 25 basis points to 5.25%. This was the first reduction in six months, and the central bank hinted at the possibility of further easing. The move was aimed at supporting economic growth amid concerns over global trade tensions and a weakening rupee, which has depreciated nearly 5% against the US dollar this year.
While some analysts expected a pause due to recent strong economic growth data, the majority viewed the cut as justified given easing domestic inflation and external risks from heightened US tariffs on Indian goods.
Sectoral Performance and Broader Market Trends
The rate-sensitive sectors emerged as the biggest beneficiaries of the RBI's announcement. The Nifty PSU Bank index rebounded sharply, leading the sectoral charge with a jump of 1.55%. This was followed by healthy gains in the Nifty IT, Nifty Metal, and Nifty Auto indices, each rallying between 0.66% and 1%.
However, the broader market sentiment was mixed. While the Nifty Midcap 100 index rose 0.53%, the Nifty Smallcap 100 index declined by 0.54%, indicating selective buying interest.
Notable Stock Movers: Gainers and Resurgent Performers
Several individual stocks captured attention with their strong performance. Financial stocks were at the forefront of the rally. Banks and Non-Banking Financial Companies (NBFCs) like Mahindra & Mahindra Financial Services, Sundaram Finance, Shriram Finance, and RBL Bank saw gains ranging between 2.4% and 6%.
Patanjali Foods staged a notable recovery, with its shares climbing 4% to ₹547.80 after a period of sustained selling pressure. In other significant moves, PTC Industries gained 4% to ₹18,854 after its subsidiary signed a key supply pact with Honeywell Aerospace.
Other prominent gainers included Himadri Speciality Chemical, which extended its winning streak, and Wockhardt, which surged 2% to ₹1,360. The Multi Commodity Exchange (MCX) also recovered strongly, rising 2.2% to ₹10,343 per share. Auto stocks, which typically benefit from lower borrowing costs, closed the session with solid gains.
The day's trading action underscored the market's positive reaction to supportive monetary policy, setting a bullish tone for rate-sensitive segments even as broader market participation remained uneven.
